Equity in State Procurement (AB 2019) Has Been Signed! Here’s What’s Next.

AB 2019 will accomplish the following:

1. Codify the goal of 25% of State procurement to be directed toward small business.

2. Fast-track small business certification for covered communities.

3. Create an education and outreach plan to keep small businesses updated and establishes accountability with State agencies.

Small business owners will now have an equitable chance of being considered in State contracts!

Small businesses make up 99.8% of all businesses in California and employ 49.8% of California’s workforce. Additionally, of the 3.9 million small businesses in California, 1.6 million are minority-owned. Despite these facts, only 14.6% of the state’s contracting dollars went to small businesses in 2020-2021. AB 2019 creates a stepping stone to increase participation by small and minority-owned businesses.

The passing of AB 2019 means that California has committed to recognizing small businesses’ contribution to the economy and that they are part of our State’s procurement process.

First is implementation of the bill. After AB 2019 is signed by Governor Newsom, the bill is chaptered with the Secretary of State’s office, and the requirements of the bill are set in motion. The “requirements” of the bill are action items to hold the State legislature and agencies accountable, for ensuring small and minority-owned businesses are getting a minimum of 25% in procurement and contracts, and that resources and support are provided, and accessible.

Next, resources are developed and dependent on the fulfillment of the requirements laid out in the bill. Listed below are the first requirements in the process:

1. State agencies that significantly regulate or impact small businesses are required to designate at least one person to serve as a small business liaison for their respective agency.

2. Each liaison is then required to develop an “Economic and Equity First” action plan an policy by or before January 1, 2024, that will provide direction, recommendations, and strategies on how to ensure small businesses are involved and benefitting from each agencies’ procurement and contract process.

3. The California Office of the Small Business Advocate (CalOSBA) within the Governor’s Office of Business and Economic Development (GO-Biz) is required to provide an annual report that depicts recommendations from CalOSBA and includes an evaluation of State agencies, and their liaisons. These reports will highlight valuable impacts, areas of improvement, and potential resources and solutions.

The CalAsian Chamber celebrates this huge victory for small and minority-owned businesses; however, the work doesn’t stop here. The Chamber will continue to work with key policy players, such as Assemblymember Petrie-Norris, and other State agencies and small business advocates, to ensure their is accountability within the Legislature in meeting all the bill’s requirements and intentions.

Receive updates from the CalAsian Chamber’s policy team today by subscribing to our newsletter! For any inquiries regarding AB 2019 or the Chamber’s policy work, please contact our Senior Public Policy Manager, Andrea Cao, at acao@calasiancc.org.